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Many 12-month CDs pay around 5% annual percentage yield (APY), and many high-yield, 5-year CDs are in the 4% APY ballpark. At 5%, $10,000 would earn $500 in one year. At 4%, a 5-year, $10,000 CD would yield $2,167 over the course of those five years, based on annual compounding.

Right now, the national average rate for a one-year CD is 1.54%. However, there are many one-year CDs that offer APYs above 4% and 5%.

Fund the CD Finally, you'll need to fund the CD. You'll only do this once. Unlike savings accounts, CDs generally don't allow you to make additional deposits. You can fund your CD with an online or phone transfer from another account or by mailing a check.

For example, a $10,000 deposit in a five-year CD with 4.50% APY would earn around $2,460 in interest. The same CD with a 1.50% APY would earn around $770 in interest, and the same CD with a 0.01% APY would earn only $5 in interest.

How do CDs work? Definition and explanation. A certificate of deposit (CD) is a time deposit account that pays a fixed interest rate over a period of time (generally ranging from 30 days to 5 years). Any early withdrawals of funds before the set maturity date come with a penalty fee.

At a solid 5% APY, here's how much a $5,000 CD would be worth at varying term lengths: 1-month CD: $5,020.37. 3-month CD: $5,061.36. 6-month CD: $5,123.48.

A 1-year CD with a rate of 5.35% may be a good option. If you invested $5,000 in the top paying 1-year CD today, you'd earn $267.50 in interest at the end of the term. And a 22-month CD?part of our 2-year term category?could net you close to $500 in interest by the end of the term.

Is There a Limit on CDs? There's no limit on the number of CDs you can have and it's possible to have multiple CDs at the same bank or different financial institutions. Whether it's appropriate for you to have more than one CD can depend on your financial goals and needs.

Most CDs require at least $500 to $1,000 to open, though some have no minimum deposit requirements. Here are the minimum deposit requirements for some major banks....What is the minimum deposit for a CD? BankMinimum depositU.S. Bank$5005 more rows ?

Savings accounts give regular access to your money; CDs don't. You can deposit and withdraw from a savings account relatively freely, but the only time you can withdraw from most CDs penalty-free is during a short period of days after a term ends.